May 30 (Bloomberg) -- The U.S. House of Representatives voted to extend for two months the National Flood Insurance Program one day before its scheduled expiration.
The Federal Emergency Management Agency contracts, required for businesses and residences in flood-prone areas, would be reauthorized through July 31 under the bill, H.R. 5740. The legislation, approved today by voice vote in the House, has passed the Senate and will be sent to President Barack Obama for his signature.
David Miller, FEMA’s associate administrator for the federal insurance and mitigation division, expressed concern about the uncertainty of short-term extensions and the possibility of a lapse. The program has $17.75 billion in debt and a $20.7 billion credit limit, said agency spokesman Lars Anderson. It couldn’t pay claims if it exhausted the limit, Miller said in a May 16 telephone interview.
Hurricane Irene cost about $1 billion in claims, and “a number of smaller disasters” may drain the fund sooner than the Congressional Budget Office’s estimate of a 2014 default, Miller said.
An earlier version of the House measure would have expanded private insurers’ role in the program. The language wasn’t included in the bill that cleared the House today.
The chambers are working to send a longer-term reauthorization to the president. The House passed a five-year extension of the program July 12, 2011, and similar language from the bill was included in a budget measure passed by the House May 10.
The full Senate hasn’t considered a committee-approved proposal to extend the flood insurance contracts for five years.
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